January 2012 - Lonich Patton Ehrlich Policastri

Maximizing Retirement: Where a Divorce Might Benefit You

January 30, 2012/0 Comments/in Estate Planning, Family Law /by Lonich Patton Ehrlich Policastri

If you’re elderly and divorced, you might be getting shorted on Social Security payments by collecting lower benefits than you might be eligible for, based on the earnings history of a former spouse. (See Wall Street Journal Article) A person can collect SS benefits based on (1) his or her own earnings, (2) fifty-percent of her spouse or former spouse’s benefit, if it greater than his or her own, or (3) one-hundred-percent if he is deceased. Divorced spouses must have been married ten years or longer and the person seeking a former spouse’s higher benefit must currently be unmarried, unless she remarried after age 60, in order to receive larger monthly benefits.

The Wall Street Journal provided this example:

Let’s say your mother was married in the 1950s or 1960s for at least a decade. Perhaps she was out of the work force raising children and subsequently worked at low-paying jobs, so her benefit might be, say, $800 a month.

By contrast, her former husband—with more years in the work force and higher wages—might be eligible for a monthly benefit of $2,000. (Social Security benefits currently max out at $2,366 a month.)

Your mother might not realize she can collect a total of $1,000 a month if her former spouse is alive, and $2,000 a month if he isn’t. If the Social Security Administration determines she is eligible for higher benefits, she also will receive retroactive amounts going back six months. For the woman in the example above, that would be a lump sum of either $1,200 (six times $200) or $7,200 (six times $1,200).

The fact that the ex-husband might have remarried does not affect what his current spouse will receive nor does it require any involvement with the former spouse. The Social Security Administration should have former spouse earnings history, whether alive or not, and make it determination based on those records.

If you are interested in learning more about divorce or preparing for your retirement, please contact the experienced family law and estate planning attorneys at Lonich Patton Ehrlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

California Case Update: Form of Title Presumption Controls Characterization of Life Insurance Policy

January 24, 2012/0 Comments/in Family Law /by Lonich Patton Ehrlich Policastri

California is a community property state, which means that all property, with certain exceptions, acquired during marriage is considered to be a part of the marital community and not one’s separate property. At common law, there is a rebuttable “form of title” presumption which, absent a contrary state law or proof as to otherwise, deems record title as determinative of the property’s characterization as separate or community. In a 2011 California Appellate Court case, the Second District confirmed that this rule applies when a life insurance policy is in the name of one spouse.

In Marriage of Valli, 195 Cal. App. 4th 776 (2011), Husband purchased a $3.75 million life insurance policy on his life with community property funds and put the policy in Wife’s name. Husband and Wife were married for twenty years with three young children. At the time of purchase, Husband had been experiencing medical problems and wanted to ensure his family was taken care of. Husband put everything in Wife’s name so that she could use it to take care of the children or disburse it as she saw fit. When the couple decided to separate, there was a dispute as to whether the policy was community property or the wife’s separate property.

The trial judge found that the policy was community property because it was acquired during the marriage and the policy’s premiums were paid during marriage. The appellate court reversed the trial court holding that the “form of title” presumption applied and the policy was therefore Wife’s separate property. The court reasoned that the act of taking title to property in the name of one spouse during marriage with the consent of the other spouse effectively removed that property from the general community property presumption. This presumption can only be overcome by clear and convincing evidence that there was an agreement that the title did not reflect the parties’ intent. In Valli, Wife established that the policy was taken in the Wife’s name, and Husband failed to rebut the title presumption with any evidence of an understanding with Wife that, despite the policy being in her name, they did not intend the policy to be Wife’s separate property.

While decisions made during marriage may seem appropriate at the time they are made, it is important that marital partners take the time to consider every scenario that may arise in the future. The Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri have decades of experience handling complex family law matters. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri, who can provide you with an in-depth analysis of your issues. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Navigating Long-Term Care Insurance Policies

January 20, 2012/1 Comment/in Estate Planning /by Lonich Patton Ehrlich Policastri

Long-term care (LTC) services assist an adult with day-to-day living to help them remain as independent as possible. These services may become necessary at any age: an older adult may need LTC services as daily life becomes increasingly difficult; a younger person might need assistance following a disabling event or accident; and anyone may need LTC services as a chronic illness progresses or during a period of rehabilitation. Most people, however, do not start thinking about long-term care until the services are needed.

LTC service costs are not covered by medical insurance or Medi-Care (designed primarily to provide access to a basic level of healthcare) and, without proper planning, can be debilitating for a family’s funds and estate plans. LTC insurance, for those who can afford it, provides a method of payment or reimbursement for services. Depending on the policy and coverage selected, LTC insurance can cover LTC in your own home, adult day care centers, residential care facilities, and nursing homes. However, navigating the plans and options available can be a challenge for most people.

There are several online resources that can assist in the consideration of long-term care insurance. The Wall Street Journal created a checklist to assist in the evaluation of a policy’s features. This tool can be used to compare policies before making a final decision on different options. MetLife, whose LTC insurance is not currently available in California, created an educational guide that defines terminology generally used in the industry, presents basic issues, and provides answers to some frequently asked questions.

Without LTC insurance, self-insurance (setting aside enough money to pay privately for potential future LTC services) becomes exponentially more important. If you are interested in learning more about creating a comprehensive plan to ensure that you or your family members are well-prepared to handle your needs and estate near the end of life, please contact the experienced estate planning attorneys at Lonich Patton Ehrlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

General Assignments Effectively Transfer Shares of Stock to a Trust

January 17, 2012/0 Comments/in Estate Planning /by Lonich Patton Ehrlich Policastri

Recall that in order to ensure the creation of a valid trust, there must be trust property. See Ensuring the Creation of a Valid Trust blog. Written declarations and general assignments generally are not the best ways to create trust property; however, they can be sufficient to transfer shares of stock, but not real property, to a trust, according to a recent California Appellate case.

In Kucker v. Kucker, 192 Cal. App. 4th 90 (2011), Trustor signed a declaration creating a revocable inter vivos trust, a general property assignment, and a pour-over will. Later, Trustor signed an amendment to the general property assignment transferring all of her shares of stock in eleven specified corporations and funds. However, Trustor did not include her 3,017 shares of stock in Medco Health Solutions, Inc. At the time the amendment was signed, the Medco stock certificate was lost and the issue before the court became whether the Trustor intended to include all the stock she owned when she amended the general assignment.

The lower court denied the petition to attach the Medco stock for failing to meet the writing requirement under the California Civil Code (which required a writing for contracts that granted credit for over $100,000). The Second District California Court of Appeal reversed and held that a general assignment of assets was sufficient to transfer shares of stock to a trust, even if the assignment failed to specifically identify the stock. The court further elucidated that, “There is no California authority invalidating a transfer of shares of stock to a trust because a general assignment of personal property did not identify the shares. Nor should there be.” The Civil Code section used by the lower court applied to agreements to loan money or extends credit made by persons in the business of loaning money, not to transfers of shares of stock to a trust.

There are many intricacies involved in the creations of trusts, and estate planning in general. To ensure your affairs are in order, or if you are interested in learning more about how to ensure the validity of your trust, please contact the San Jose estate planning attorneys at Lonich Patton Ehrlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Ensuring Your Child’s Safety

January 13, 2012/1 Comment/in Family Law /by Lonich Patton Ehrlich Policastri

George Molho, a kidnapping survivor, has recently shared his experiences from when his father abducted him in 1978 and moved them to Greece from his home in Texas. In sharing his story, Molho (for more information on his new memoir, Scarred, see www.georgemolho.com), a passionate advocate for child kidnapping and abuse victims, is trying to bring awareness to the problem and efforts to develop solutions that protect children.

As a seven-year-old in 1978, Molho was taken from his home in Houston by his father, a man with a bad temper, obsessive need for control, and desire to inflict pain. At the time, no one, not even his mother, believed Molho when he predicted his father’s plan and tried to warn them. When young children express fear or concern about even a close friend or family member, adults tend to chalk it up to shyness, a ploy for attention, or fantasy, Molho said. “Trust your child’s instincts,” he says. “If they act uncomfortable around someone because they can’t verbalize their feelings, or if they tell you they’re uncomfortable, trust them. No matter who it is, if they tell you a person scares them, protect them.”

Molho also offers these lesser-known tips for protecting children from kidnappers, whether they’re friends or family:

Teach children how to fib on the phone. If they’re home alone, for instance, and someone calls asking to speak to their mother or father, they might say, “My mother’s busy in the kitchen right now and asked me to answer the phone and take a message.” Put them to the test by having someone they don’t know, one of your friends or co-workers, call.
Make approved lists of people who will deliver any important news to them. If Mom or Dad is in trouble or hurt, only these people will know and will tell the child. Even if Uncle Bob tells them Mom is in the hospital and the child needs to go with Uncle Bob, if he’s not on the approved list, the child should not go. This is a common ploy.
Teach them, train them and give them permission to defend themselves. This is very important and it saves lives. Most children are taught to be polite and respect adults; it’s far safer to risk offending an adult – even if it turns out the adult meant no harm. Screaming, kicking and running away are perfectly acceptable if a stranger grabs your arm – even if the stranger is smiling sweetly.

Family law proceedings can be contentious. Emotions tend to run high for all those involved; sometimes this leads to actions that endanger the safety of the children caught in the middle. George Molho’s tips may help ensure the safety of your children. The Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri have decades of experience handling complex and heavily disputed child custody issues. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri, who can provide you with an in depth analysis of your issues. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

Estate Planning Considerations for Family Business Owners

January 12, 2012/0 Comments/in Estate Planning /by Lonich Patton Ehrlich Policastri

Family business owners should take extra care to ensure that their interests are protected. Most business owners’ shares represent a large part of their estate’s value. However, few take the time to lock in valuable estate planning benefits that come in the form of a buy-sell agreement.

A buy-sell agreement can help protect an owner’s business interest by ensuring they do not lose control of their ventures and protect their heirs by restricting shareholders, partners, or members of a business from unilaterally transferring an ownership interest to anyone outside the group. Further, since the death of a co-owner could have a disastrous effect on the finances of a business, life insurance policies covering the lives of co-owners generally form the financial backbone of any buy-sell agreement. A buy-sell agreement that is not covered by life insurance death benefits should specify that a buyout should be made under a multi-year installment payment arrangement, which provides remaining co-owners with the flexibility to fund the buyout.

Without a buy-sell agreement, the result on the deceased co-owner’s estate could be drastic. First, there may be no market for the remaining business ownership interest left by the deceased co-owner—the proceeds of which might be necessary to pay estate taxes. Second, heirs of the deceased co-owner will be left to work with the IRS to value the deceased’s share of the business for estate tax purposes, an expensive and time-consuming affair. With a buy-sell agreement, however, a business ownership interest can be sold under pre-approved financial terms and the price set also establishes the (realistic) value of the business ownership interest for estate tax purposes.

If not drafted carefully, the IRS can disregard the buy-sell agreement. To ensure that your buy-sell agreement will withstand IRS scrutiny, please contact the experienced estate planning attorneys at Lonich Patton Ehrlich Policastri for further information on these types of transactions. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Loss of Parental Rights = Loss of Standing in Proceedings Concerning the Child

January 4, 2012/0 Comments/in Family Law /by Lonich Patton Ehrlich Policastri

Once a parent has acquiesced to a termination of parental rights, he or she has no remaining legal interest in the child’s affairs. This means the parent also does not have standing to appeal orders relating to the child’s placement. A recent California Supreme Case affirmed this rule.

In In re K.C., 52 Cal. 4th 231 (2011), K.C. was one of eight siblings, two of whom were deceased and the other five of whom were placed with grandparents after separate juvenile dependency proceedings resulting in the termination of Mother’s and Father’s parental rights as to the five siblings. While an infant, K.C. was removed from his mother’s custody and placed with a foster family who wished to adopt him. K.C.’s grandparents petitioned for K.C. to be placed with them, however, the child services agency doubted their ability to care for a sixth child and was concerned with the parents’ continued access to the kids. Father did not object to the termination of his parental rights and supported Grandparent’s request. The trial court denied Grandparents’ petition and they failed to timely appeal. Instead, Father appealed the order. However, he did not object to the judgment terminating his parental rights but limited his argument to the issue of K.C.’s placement.

On appeal, the Fifth District Court of Appeal dismissed Father’s appeal and held that Father could not show that the placement decision affected his parental rights and he thus was not aggrieved by the decision. The California Supreme Court affirmed this decision. Only an aggrieved person has standing to appeal, otherwise the party does not have rights or interests injuriously affected by the decision in an immediate and substantial way. Since Father acquiesced to the termination of his parental rights, he relinquished the only interest in K.C. that could render him an aggrieved party.

Throughout child custody or parental termination proceedings, proper objections must be made if a parent does not want to risk losing standing to appeal judgments concerning the child. The Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri have decades of experience handling complex child custody and divorce issues. If you are contemplating divorce, please contact the Certified Family Law Specialists* at Lonich Patton Ehrlich Policastri, who can provide you with an in depth analysis of your issues. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

*Certified Family Law Specialist, The State Bar of California Board of Legal Specialization

California Case Update: Form of Title Presumption Controls Characterization of Life Insurance Policy

Navigating Long-Term Care Insurance Policies

General Assignments Effectively Transfer Shares of Stock to a Trust

Ensuring Your Child’s Safety

Estate Planning Considerations for Family Business Owners

Loss of Parental Rights = Loss of Standing in Proceedings Concerning the Child

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